Dr. Beth Dion works at the St. Anthony/Centura North Ridge medical practice in Thornton, part of the Centura system that has hired 250 in-house physicians in the past year in an effort to draw patients into “medical homes.”

Hospitals say their ballooning rosters of staff doctors will allow them to compete for “accountable care” contracts with Medicare under health care reform, which promises profit- sharing to groups that save the government money and deliver quality care.

Some doctors, weary of combatting bureaucracy and diminishing returns for primary care, welcome the staff positions.

“The business side was already taken care of, that was a big plus,” said Dr. Beth Dion, who took a staff post with St. Anthony, part of the Centura system, when her residency there ended a year ago. “You’re allowed to see your patients and do what you’re trained to do and what you want to do.”

Some health care experts say the on-staff trend, a revival of a 1990s movement, concentrates more power in hospitals that are major contributors to health care inflation.

Hospitals will gain from keeping specialty surgeries and tests in-house, at the potential expense of locked-in consumers and those who pay the bills.

“This is a stubborn effort to keep hospitals at the center of the health care system by buying up everything that might stand in their way,” said David Dranove, a health care expert at Northwestern University’s Kellogg School of Management. “It’s the same managers that couldn’t contain costs over the past decade that are now pretending they’re going to do a different job.”

“I’d hate to see an environment where providers are all owned by huge corporations, and that results in decreased patient opportunity,” said Dr. Steve Krebs, chief medical officer of the independent Physician Health Partners practice group. “I foresee that as a major problem.”

More in-house hires

Centura, a partnership overseeing the St. Anthony hospitals, Porter and Littleton Adventist and others, now has 250 employed physicians, up from zero a year ago, said Dave Hesselink, interim chief of physician enterprises at Centura.

The hospital system, like most nationally, had stocked up on physicians during the Clinton-era health care reforms of the 1990s, then divested all those doctors and practices through the 2000s.

Exempla, overseeing the hospitals St. Joseph, Lutheran and Good Samaritan in Lafayette, is also adding staff physicians, hiring 12 a year in a five-year plan to add to its existing 106 staff physicians.

Like many health systems, Centura wants to draw all patients into a “medical home,” where comprehensive care is coordinated among doctors, therapists, pharmacists and others.

Private insurers are experimenting with the medical-home idea, which seeks to both improve care through better communication and cut costs by eliminating redundancy and emphasizing prevention.

The most important payer of all, federal Medicare, is promoting such experiments as part of the 2010 health reform act.

Medicare is encouraging hospitals and doctors to create “accountable care organizations” or ACOs, which can profit by improving quality and cutting spending.

ACOs that spend less per patient than a comparable control group will keep some of the government’s savings.

Shift in health care

Hospitals and doctors both being “at risk” for losing or profiting in contracts, while trying to improve quality, “is the future of health care, not sickness care,” Hesselink said.

The integration concept isn’t new in American health care, said Northwestern’s Dranove — such relatively closed systems already exist in HMOs and Kaiser Permanente.

“What’s the difference between an HMO and an ACO?” Dranove said. “People already hate HMOs.”

More than half of U.S. doctors are now employees of hospitals or integrated systems like HMOs, a New England Journal of Medicine report said.

University of Colorado Hospital does not employ doctors directly. Instead it uses doctors hired by the university’s School of Medicine and the management group University Physicians Inc.

But the swirling influences are pushing University Hospital to explore new types of relationships with doctors who can feed patients into the Anschutz Medical Campus.

The hospital is talking with primary care doctor groups who might not become full-time School of Medicine faculty but whose stand-alone clinics would have a new, closer tie to the hospital.

“The days of the sole practitioner, the entrepreneur physician, are fading,” said University of Colorado Hospital president Bruce Schroffel.

University Hospital’s proposed joint venture with Poudre Valley Health System could provide more avenues for cementing ties to physicians.

Primary-care perks

Hospitals can lose up to $250,000 with each primary-care doctor each year in the first years of direct employment, according to the New England Journal of Medicine report in May.

But the potential revenue is alluring: One primary-care doctor can provide over $1 million in referrals a year, Krebs said.

Specialists in high-dollar, high-volume fields like heart bypass or orthopedic surgery can draw even more money.

Hospitals cannot guarantee their in-house doctors will steer all patients inside the system, experts said. Physicians say they will refer patients to the specialists the patients prefer or who have the best record, regardless of hospital affiliation, and the experience of the 1990s trend proved that out, Dranove said.

The worry is that as hospital systems tighten their grip on physician practices with extensive databases and incentive-laden contracts, patient choice and competition will suffer.

A heart specialist’s treadmill test, for example, can be billed as an outpatient expense when done by an independent practice, Krebs noted. But when done at an inpatient hospital, the bill can be two to three times higher.

That is a fear for insurance companies and government payers, acknowledged University Hospital’s Schroffel, but insurers have brought some of the headaches on themselves by making doctor practices such a bureaucratic nightmare.

It’s no wonder many young doctors are attracted to a straightforward employment contract rather than having to bill hundreds of insurance companies, Schroffel said.

The major insurers will eventually quash the higher billing techniques from the new conglomerates, Krebs said. “It will take them 18 to 24 months. It will be a short-lived bonanza.”

The scramble to lock up physicians is compounded by the growing national and state shortage of primary-care doctors. America needs 40,000 more family doctors than medical schools are expected to produce in the next 10 years, according to health researchers. More graduates are currently drawn to high-paying specialties or hospital systems.

“Physicians are looking at alternatives to the small practice lifestyle, in Western Colorado and everywhere,” said Steve ErkenBrack, president of Rocky Mountain Health Plans in Grand Junction. “I don’t think there’s any part of the country where physicians aren’t asking if there’s a better way they can practice.”

Michael Booth was a health care & health policy writer at The Denver Post before departing in 2013. He started his journalism career as an assistant foreign editor at The Washington Post before moving with family to Denver and taking a brief stint with the Denver Business Journal. During a 25-year career at The Post, he covered city and state politics, droughts, entertainment and wrote Sunday takeouts, and was part of two Pulitzer Prize-winning teams for breaking news coverage.

Last month, Denver’s Department of Safety fired a deputy sheriff for using racial slurs and harassing inmates and a police sergeant for drinking while in uniform and abandoning a post to have sex with a woman.

A wedding and special events’ planning business has agreed to pay a $200,000 settlement to five employees living in the country illegally after allegedly failing to pay them minimum wages and overtime and discriminating against them because of their race.